Despite government efforts to increase small-business lending, traditional loans are still tough to get from banks that pulled back in the recession.

A recent survey by the National Small Business Association found that a third of firms can't get adequate financing. Many small-business owners are just treading water. "The situation has become acute," said Jerry White, executive director of Southern Methodist University's Caruth Institute for Entrepreneurship. "I see quite a few people who are just getting by. It takes persistence and a little creativity, but the serious players are figuring out how to survive."

Some Dallas-Fort Worth entrepreneurs are surviving by finding alternative sources of financing. They've used credit cards, found money online, pledged their accounts receivables as loan collateral, tapped their home equity and secured private investments.

Alternative financing isn't for everyone. Some people might not be able to stomach the risk, higher costs and red tape.

For others, it's the only option. Here are a few of their stories.

Online investors

William Bralick found 104 strangers online to lend him $10,000.

Last fall, the chief executive of Irving-based Paladin Logic Ltd. needed a bridge loan while awaiting $25,000 from private investors called angels. He turned to the Lending Club, a Web site that lets individuals lend to each other.

The angel money fell through, but the loan was a lifesaver, Bralick said. Three-year-old Paladin is a software engineering firm with five employees.

"The experience was very good, and it helped us get through some tough times," Bralick said. "I've never been late on a payment. It wasn't that; bank underwriting standards have changed radically."

On LendingClub.com, individuals post an application to borrow up to $25,000 for three years. Lending Club sets a fixed interest rate of 7 percent to 21 percent, and investors bid to fund the loan. Borrowers must meet credit criteria, such as a FICO score of at least 660.

Lending Club investors earn an average annualized return of nearly 10 percent, said CEO Renaud Laplanche.

"I see lots of small businesses whose line of credit has been cut off," Laplanche said.

More than 300,000 members helped increase Lending Club's loans from $16 million in 2008 to $59 million in 2009 as more borrowers sought alternative financing, he said.

Texas securities regulators, who have seen an increase in consumer complaints about online and alternative funding sources, warn consumers to beware.

"Any time an individual exists with a company only on the Internet ... there's certainly the risk of finding someone out there to rip off the average Joe," said Joe Rotunda, enforcement chief for the Texas State Securities Board.

Bralick said he may never go back to banks.

Cash-flow loan

Father-and-son Javed and Christopher Aslam couldn't get their existing banker or other banks to lend them money to help expand their restaurant business.

A business associate suggested they contact GE Capital Franchise Finance, which looks at a company's cash flow as the main repayment source of a loan. The lender ended up making three loans totaling nearly $15 million to the Aslams' company, Tribox, in the last several months.

Last summer, the Aslams secured $12.4 million to buy 14 Jack in the Box restaurants and refinance existing debt. The Aslams, who already owned seven Jack in the Boxes, brought in Yasin Choudry as a partner in the new locations.

"We couldn't have done this deal without them," said Christopher Aslam, who at 16 mopped floors at the business his father started in 1988. "Even our banker said it's a pretty sweet deal."

The loan took six months and carried stricter terms, but it allowed for early repayment and had a lower interest rate than the previous loan, he said.

"GE is more selective on the franchise restaurant brands it lends to, given that casual dining has been under stress for a couple of years now," said Trey Brown, senior managing director for GE Capital Franchise Finance. "Jack in the Box has outperformed rivals."

Brown liked Tribox's steady growth and increasing same-store sales and operating income. Revenue was not available for Tribox's restaurants, which are mostly in the Dallas area and employ 550 people.

In December, GE Capital lent Tribox $1 million to buy real estate, and last month, it extended $1.6 million so it could build a Jack in the Box in Dallas.

"It's really the only way to go," Christopher Aslam said. "I don't see banks loosening up for a while."

Federal grant

When seeking financing last year, Janet Capua and her son Carlo Capua had an uphill battle as first-time borrowers for a start-up restaurant.

Few banks are lending to start-ups these days.

In early 2008, Carlo Capua returned to Texas after teaching English overseas for 10 years, and his mother, a dental hygienist for 40 years, lost her job.

They decided to start a catering business that May, using a commercial kitchen at Samaritan House, a shelter for HIV-positive people in Fort Worth.

When cafe space became available last year in the Fort Worth Community Arts Center, they decided to go for it.

The Capuas asked Southwest Bank in Fort Worth for a loan to buy equipment for Z's Cafe. The Z stands for Janet's maiden name, Zito.

"Banks aren't as interested in doing something with a restaurant because historically banks have had losses with restaurants," said Southwest senior vice president Charleen Goldston. "If it's a start-up or business without a history, that's going to be difficult."

Southwest found an economic development loan and accompanying grant through the Federal Home Loan Bank for Z's Cafe. Southwest would not have made a loan otherwise, Goldston said.

The $20,000 loan and $3,000 grant were partly based on Z's Cafe hiring of Samaritan House residents. The Capuas also had to pitch in 15 percent equity.

"We had no idea this grant existed," Carlo Capua said. "Without Southwest Bank's help, I don't think the business would have gotten off the ground."

Year-old Z's Cafe's chicken salad sandwich already has a following, and the business is flirting with the break-even point.